Thursday, January 28, 2016

Wounded Warriors: An Opportunity to Talk about Investment and Trust

You may have watched Tuesday’s CBS Evening News report or read Wednesday’s article in The New York Times on the Wounded Warrior Project. Both focused on the amount of money the organization spends on fundraising and administration, and quoted former employees who were highly critical of some of the Project’s operations and practices.

The Times’ article brings up some valid points, but it doesn’t do justice to the most important issue: Why is all of this investment needed in the first place – what’s essential to fundraising in complicated economic and political environments, and what’s not?

You’ll see that AFP has invited the Wounded Warriors Project CEO, Steven Nardizzi, to speak at its upcoming AFP International Fundraising Conference as part of our new session, “Rebels, Renegades and Pioneers.” He won’t be alone at this session; he’s one of many nonprofit and fundraising leaders with unconventional approaches whom we’ve invited for provocative discussion about what it takes generate real and sustained social impact in the world.

In many ways, we’ve shortchanged the public, and ourselves, by not talking openly about what it takes to make our organizations run well.  Let’s start by asking how we recruit and retain smart, engaged professionals?  How do we afford and implement efficient technology, best-practice marketing, and a vibrant culture?  How do we effectively steward donors and increase our fundraising revenues?

We know that impact requires investment.  But how much investment and how are those funds allocated?  What are the checks and balances in nonprofit management and governance to red-flag strategic investment that crosses the line into excessive spending?  Does a corporate business model really fit the kind of work that we do in the charitable giving sector?

I’m not suggesting that a review of the Project’s activities and expenditures is not warranted. The Wounded Warrior board needs to speak up and address these allegations, and they need to do it quickly. But to be fair, after hearing for years that nonprofits should be run like businesses, is it really so surprising that a nonprofit generating substantial revenue threw an event on a scale of a Google or an Apple?

It shouldn’t be surprising.  But it shouldn’t be happening either.

It shouldn’t be happening because charities are not businesses and their stakeholders are not consumers. The interests, culture and operations of a profit-making enterprise are enormously different and separate from those of a mission-driven nonprofit. There’s a unique element of partnership and trust that exists between any charity and the public that transcends the consumer experience.

Here in the nonprofit sector, we aren't trying to achieve short term fixes, but rather, to generate long-term social impact, social attitudes and commitment. We do that in a very public-facing way, hand in hand with people who trust us with their philanthropy. That pact with the giving public – that shared vision and investment – is the driver that distinguishes charitable organizations from the corporate sector.

All of us wince when an unfavorable light is cast on a nonprofit organization or a nonprofit leader.

When trust is compromised in our sector, rightly or wrongly, we all suffer for it.

However, now the organization has an opportunity—we all have an opportunity—to talk about what it takes for our sector to thrive. To talk about the investments we need to make not just to ameliorate conditions but to actually engage our internal and external stakeholders, and to change the world for the better.

Friday, January 15, 2016

Remembering Tony Elischer

Tony Elischer died this week. Some of you may know him, some of you may not. Tony was familiar to many from his participation in fundraising conferences around the world, including the AFP International Conference, the International Fundraising Congress in Holland and the AFP Toronto Congress.

Tony touched so many of us and testimonials testifying to his contributions to our field have been flooding in. I questioned whether I should add to them.

But I want to because Tony exemplified many of the best characteristics of our profession and the people who work in it.

I met Tony in the early 1990s. He was passionate, fiery, opinionated, principled—absolutely Type-A in his personality. It’s striking how many testimonials referenced disagreements with Tony—and how many of them referenced picking up the threads again afterwards.

So many qualities made him stand out: his generosity; his enthusiastic pursuit of the fresh and the inspirational; and his support for new ideas and concepts that helped us rethink fundraising. He was a consummate performer, never happier than when he was out there engaging with a critical audience.

But for all those who saw him as the showman on the stage in front of hundreds or thousands of people, there were those who saw a different face working in the field in Asia, Africa and Latin America. That was where his innate generosity, his thoughtfulness and his passion for the transformative power of our work truly shone—and it was there that his impact was truly felt.

I’m not ready to say goodbye to Tony – and I won’t. Because if he is not here to continue his work, the responsibility for that falls on our shoulders to take it forward for him. I know that all of us will accept that challenge.

Monday, January 4, 2016

Betting on the Big One

Happy New Year! I hope your fundraising in 2015 was successful and positioned your organization for an even better 2016.

With the arrival of the New Year, you’re going to be hearing and reading a lot about what we’ll see over the next 12 months and how your organization’s fundraising should be responding to new trends and ideas. We’ll be featuring some of this guidance in our eWire and website.

Amongst the many stories on social media, major gifts and donor retention—all of which I think will continue to be critical in 2016—there are a few ideas I’m going to be highlighting as well in the month of January.

One of the most interesting findings came from our partner, the Stanford Social Innovation Review, about donors making transformational gifts to create social change. While donors indicate they often want to make gifts that lead to significant social change, a large majority of their contributions don’t focus on social change. Perhaps most importantly, the study found donors aren’t usually working with organizations that have the capacity to create social change or that that give them the opportunity to make such change.

While the findings show that there typically needs to be a “natural match” between the donor and the organization to engender a transformational gift, there are some best practices charities can learn from, including:
  • Building a relationship based on trust;
  • Creating a clear investment hypothesis—how a gift will take your organization to a new level;
  • Developing a “but for” rationale, highlighting the difference the gift will make and what the organization will be able to do because of the gift; and
  • Ensuring a “healthy dose of co-creation,” using the donor’s experience and expertise and allowing him or her a role in shaping the opportunity.
While I think these are good best practices, I’m struck that most of them aren’t just applicable to our major gifts but generally to our entire approach to fundraising.

We’ve been talking a while in the profession that our donors want to make more than just a gift—they want to make a difference. While your organization may not be logistically ready (yet!) to bet on a major transformational gift, we all need to get in the mindset of approaching our donors this way. Whether we develop a “clear investment hypothesis” or stick to the more traditional case for support, this is how we need to work at donor relations this year.

Read the article, and like any good advice, take what works for your organization. But don’t forget the main thrust: we need to change how we talk to our donors, and this study is an excellent starting point.

Friday, December 18, 2015

Charitable IRA Rollover Made Permanent: The Impact of Public Policy

I’ve often said public policy is a lot like fundraising: creating long-term relationships, talking about the cause, educating about needs and ultimately, asking for action that creates change. It’s a lot of work, often behind the scenes, but it can have huge transformational impact.

In that vein, I’m proud to say that we’re now seeing the fruits of our labor that have stretched back for many years.

Congress has passed, and the President is expected to sign today, legislation that would make the Charitable IRA Rollover permanent. This is a huge step for philanthropy and fundraising in the U.S.

The IRA Rollover was first enacted in 2006, but it was only given a two-year window before expiring. Over the last decade, AFP and the charitable sector have needed to lobby Congress and the White House numerous times to have the Rollover (once again) signed into law, only to see it sunset and have to start all over again.

But each time, we’ve gotten more and more support from Congress for making the Rollover permanent. All of our education, cultivation and grassroots work have finally paid off, and it is our causes and the people who depend on our services and programs that are going to benefit.

I want to thank our partners and sister organizations in the sector for helping push this legislation. This has truly been a collaborative effort, with so many organizations representing a diverse array of causes from across the U.S. making their voices heard. Countless donors and volunteers have communicated with Congress as well, lending their perspective and support.

But mostly, I want to thank all of you—our members. Many of you have been receiving our email blasts on this topic for years. A few times, you probably wondered why are we even still bothering? Yes, it’s been a frustrating process at times.

But through our commitment to our organizations and the people we serve—and because we continued to stay involved in the public policy process—we have achieved our goal. We have made transformational impact through advocacy—further evidence that we NEED to stay engaged with our government and public policy makers.

Thank you for everything you’ve done to advance the Charitable IRA Rollover process. Every little bit has helped.

Oh, and on another public policy issue, we’ve been told that the IRS received approximately 38,000 submissions and comments on its proposed substantiation rules that would have charities gather certain donors’ social security numbers. That’s an extraordinary figure for a technical IRS regulation!

Thanks to all of your submitted comments to the IRS. Again, it shows the impact we can have when we engage with our governments, and I am sure that number of comments is going to have a significant influence on the IRS’ thinking. We’ll keep you posted.

Tuesday, December 15, 2015

IRS Proposal May Impact Charitable Giving

One of the tenets of AFP is to work in partnership with government. Government can play a role in encouraging contributions and creating an environment more conducive to philanthropy. Government also has a role in regulating charities, and AFP has worked very positively in collaboration with a variety of regulators around the world.

But sometimes we have to disagree with a proposal, and come to the table to explain the unintended consequences of a proposal. Now is one of those times.

The Internal Revenue Service (IRS) is proposing regulations that would create a new donor disclosure form for donations over $250 that would require charities to collect their donors’ social security numbers. The IRS isn’t making the form mandatory now, but even the “optional” proposal concerns us, and it could be obligatory to use in the future.

AFP is working on official comments now, but it’s critical that the IRS hears from as many members as possible on this issue.

The IRS has said for the longest time that donors should almost never give out their social security numbers. But these regulations reverse that and could lead to all sorts of problems and burdens for charities.

We’re already hearing from members who have been contacted by donors who are concerned about this proposal. They’re worried those donors may not give as much as they have in the past so they won’t have to disclose their social security numbers.

I hope you’ll take ten minutes (tops!) to write up a short email to the IRS. You can find all the information, including some sample templates and ideas, here on the AFP website. The deadline is Wednesday, so your action is appreciated and needed soon.

I’m proud of AFP’s record in working with the IRS and other regulatory bodies. We have a long history of collaborating with regulators in developing policy that protects donors and others while ensuring fundraisers have the capacity to raise the funds their organizations need.

But we need to demonstrate to the IRS the negative impact this proposal will have on the charitable sector. Thank you for responding, and for everything you do to support our profession!

Tuesday, December 1, 2015

Giving Tuesday

Now in its fourth year, Giving Tuesday, celebrated Dec. 1, has harnessed the power of social media to become an important global movement that supports giving and philanthropy. Standing in stark contrast to the seasonal commercialism of days such as Black Friday and Cyber Monday, Giving Tuesday has grown tremendously because its theme of giving back resonates with people all over the world.

People ask me occasionally if AFP, which began and continues to celebrate National Philanthropy Day in mid-November, also celebrates Giving Tuesday. The answer is an unqualified yes.

We take just about any opportunity to herald the need, the benefit and the rewards of philanthropy. The charitable giving sector needs all of our voices to remind the public about the importance of giving and volunteering. Whether it’s Giving Tuesday, National Philanthropy Day, or even other days such as Make a Difference Day, these events bring attention back to philanthropy and charities. Even in the “season of giving,” people need to hear these messages, often several times, for them to be moved to action.

I see National Philanthropy Day as the beginning of the “season of giving” and an opportunity to remember the impact philanthropy has on our communities. Giving Tuesday is the perfect kickoff to begin one’s giving as part of the holiday season The two days complement each other well, so much so that AFP held its second annual National Philanthropy Day Honors at the 92nd Street Y, which is the organization that created Giving Tuesday.

I’m excited to see that giving continues to increase on Giving Tuesday. But in the end, the numbers are only part of the story that AFP endeavors to tell to the philanthropist in all of us. The public spotlight that days like Giving Tuesday and National Philanthropy Day shine on philanthropy and the work of the charitable sector matter very much to those of us in the fundraising profession.  It’s only by engaging and retaining donors that we will increasing giving and volunteering around the world.

I hope your organization celebrated National Philanthropy Day in November and is now recognizing Giving Tuesday. They are both critical events that remind us of the impact we have when we come together to make a better world.

Tuesday, November 24, 2015

The Conscience of the Sector

Rick Cohen passed away last week.

If you didn’t know who Rick was, he was a crusading journalist who strove to unearth and correct injustices in our sector and our society, and fought every day for the rights of the underserved and downtrodden in our communities.

Rick never flinched from taking on “the powers that be” and established ideas about philanthropy that needed to be rethought as the world changed. His work has transformed the conversations we have in the sector about how we provide services, our responsibility to our constituents and what philanthropy truly means in our society.

I think Rick fought so hard because he believed so much in the power of philanthropy—of people coming together to change our world. But he also believed that because of the influence that the sector wields—because people give us their money freely and believe in what we do—that we have to abide by the highest possible standards. Simply because we do good work doesn’t mean that we get to slide by on issues related to accountability and transparency, to name just a couple.

The Nonprofit Quarterly, where Rick worked for many years, has set up an online memorial for him, and one of the first commentators described Rick as “the conscience of the sector.” I couldn’t agree more.

I may not have always agreed with everything Rick wrote, but I knew his arguments would always be thoughtful, backed up with strong evidence, and make us rethink how we always do things.

Rich Cohen will be missed greatly.